CVS Group profits grow as pandemic-era pet ownership boom continues

CVS Group has reported another earnings boost as a rising British pet population helped the company through a more challenging economic climate.

Profits at the veterinary services provider jumped by a third to £25.7million in the year ending 30 June, thanks to lower acquisition costs and revenues increasing by 8.6 per cent to £554.2million.

Sales were boosted by a strong performance from its online retail business Animed Direct and the release of pent-up demand for non-essential procedures, which had been postponed by Covid-related restrictions.

Organic revenues were responsible for the majority of turnover growth, even though the company completed nine acquisitions throughout the financial year.

One of these takeovers involved Quality Pet Care, which the firm was then forced to sell after the UK competition regulator said the deal would likely cause a ‘substantial lessening’ of competition in certain local areas.

This led to CVS incurring £12.4million in one-off impairment costs, though overall costs remained low enough to ensure the group posted an expansion in profits.

The London-based vet surgery operator has seen substantial growth in recent years as British pet ownership boomed during the pandemic. 

Since March 2020, about 5.4 million pets have been acquired, while more than a third of UK-based animal owners gained their first pet, according to a report published in late June by vet charity PDSA.

Membership of CVS’s Healthy Pet Club and Healthy Horse schemes, which offer discounts and the chance to spread preventative veterinary care costs over a longer period, expanded by an additional 4.4 per cent to 475,000.

The firm’s chief executive Richard Fairman said: ‘The veterinary market remains resilient, with an increasing pet population providing favourable dynamics and a strong platform for sustainable growth across our integrated services.’

CVS employs an estimated 5,000 nurses and vets across more than 500 vet practices in the UK, Republic of Ireland and Netherlands, including 35 out-of-hours sites and eight specialist referral hospitals.

Last month, it opened a site in a Dobbies garden centre, Britain’s largest garden centre retailer, which supermarket giant Tesco once owned.

Plans are also in place to launch three more greenfield outlets during the current financial year, as well as a new veterinary hospital in Bristol.

Company chairman Richard Connell said: ‘The veterinary sector is seeing favourable market and consumer trends with an increased pet population, enhanced life expectancy and the continued humanisation of pets, with owners willing to spend more on their care.

‘Our approach in providing the best possible care through our fully-integrated veterinary services model positions CVS well to benefit from these favourable trends.’

CVS Group shares were up 1.1 per cent to £16.27 during the early afternoon on Thursday, although their value has tumbled by over 36 per cent in the past 12 months.